MediaTek have risen from relatively humble beginnings, designing reference feature 'phones to allow relatively small manufacturers to bring a branded product to the market, to competing with the established and bigger names in mobile chipsets such as Qualcomm, Samsung and NVIDIA. In 2015, they are one of the major mobile system-on-chip supplier in the industry and their portfolio of mobile system-on-chips has evolved from providers of inexpensive and less than optimized application processors, through to sophisticated and refined multi-core chips including on-die networking, location and digital imaging processors in a similar vein to Qualcomm and the Snapdragon component. MediaTek once seemed to follow the market trend but have in the last twelve months introduced new chipsets that are going down a slightly different route to the competition. It was MediaTek's who produced the eight core, "super mid" range chipsets that manufacturers have eagerly snapped up to put into their mid range devices, creating an echelon of devices that purport to offer most of the performance of a flagship device but at a significantly reduced cost.
However, MediaTek has also been a victim of heavy competition within the industry. As its product portfolio becomes more sophisticated, unit prices has also increased and there are component manufacturers able to undercut MediaTek. This means that some device manufacturers are switching to MediaTek's cheaper competition. MediaTek is also facing something of a branding challenge as even if its chipsets are at least comparable with the Qualcomm Snapdragon and Samsung Exynos, the perception of some customers is that the chipset is somehow inferior. There are signs that this customer attitude is changing, but it may take some time yet before we see traditional western flagship devices with MediaTek chipsets rather than a Qualcomm system-on-chip under the skin. Earlier in the year, MediaTek reduced handset chipset sales targets by 10% because of the increased competition within the industry and just recently, has been the subject of a Chinese-language report, appearing in the Economic Daily News, highlighting that the business is planning to shed between six hundred to nine hundred jobs, between five to seven percent of the workforce. MediaTek has stated that it is not the source of this article and has denied the report.
The business is facing these challenges head on and has been buying up smaller companies over the last year, such as Chingis Technology, Richtek Technology and ILI Technology. These are bolt-on acquisitions that should close early in the New Year and should help MediaTek improve its technology going forwards. With the business reporting reduced profits and sales because of competition within the industry, and these additional acquisitions likely to increase the workforce numbers, there may be additional rumors and reports of expense or job cuts in the coming months. We will keep you updated with the news as and when it appears.